Standing Committee B

[Mr. Peter Pike in the Chair]

Gambling Bill

Clause 267 - Gaming machines

Amendment proposed [this day]: No. 369, in clause 267, page 118, line 30, leave out 'one or two' and insert 'four'.—[Mr. Moss.] 
Question again proposed, That the amendment be made.

Peter Pike: I remind the Committee that with this we are discussing the following:
No. 370, in clause 267, page 119, line 15, leave out subsection (7). 
Clause 267 stand part. 
No. 364, in clause 268, page 119, line 20, leave out 
'an on-premises alcohol licence in respect of premises' 
and insert 
'a premises licence under the Licensing Act 2003'. 
No. 365, in clause 268, page 119, line 23, leave out 'they think that'. 
No. 366, in clause 268, page 119, line 25, leave out paragraph (a) and insert— 
'(a) relevant representations relating to the licensing objectives have been received and upheld,'. 
No. 367, in clause 268, page 119, line 33, leave out from '(3)' to end of line 36. 
Clause 268 stand part. 
Government amendment No. 363. 
Government new clause 16—Gaming machines: automatic entitlement. 
Government new clause 17—Pub gaming machine permits. 
Government new clause 18—Removal of exemption. 
Government new schedule 2—Pub Gaming Machine Permits.

Malcolm Moss: Welcome back to the Chair, Mr. Pike. Before I was interrupted by the lunch break, I was discussing permits and asking a few questions about whether they will be required by pubs exercising their grandfather rights in order to retain the same number of machines. I was discussing also the prescribed fee if that were the case. Earlier, the Minister was unable to provide any idea about the scale of the fee, but perhaps he has some further information that will be of use to the Committee.
Currently, in order to get a machine into a pub, a case must be put to a magistrates, and—I presume—the applicant gets a piece of paper akin to a permit. I presume also that one must pay a fee per machine or  per permit. If a fee is charged, it would be useful to know what it is, what the Government's thoughts are about the fee alluded to in new clause 16(2)(b), which is to be prescribed by the Secretary of State by regulation, and whether that fee will be akin to the current charge. 
We have before us an amendment that strikes out two clauses, some new clauses in lieu of them and a new schedule. The British Beer and Pub Association is particularly exercised by the way in which the local authority—the licensing authority—can literally step in and question, and presumably remove, the permit for machines in a particular pub. Under the Licensing Act 2003, the local authority has a similar power to move in and revoke the licence that it has offered or given to a pub or establishment. Before the local authority can do that, however, it must go through several different stages, which involves taking information from the general public, such as interested parties, local residents and people who have drawn the authority's attention to the matter, or from responsible authorities such as the local police. Before the local authority can even write to the pub, saying, ''It has come to our notice that—'', it needs firm evidence from either interested parties or responsible authorities. 
In the Bill and in new clause 18, which the Government propose as a replacement for one of the existing clauses, the licensing authority can just make an order disapplying section 264. The legislation does not mention interested parties or responsible authorities; the local authority can just go in. An amendment considered earlier would have removed the words, ''think that'', which make it far too easy for a local authority to move in and do something about the machines at a particular pub or location. 
At the heart of our amendments is the desire to clarify the situation so that the discretion in the hands of the local authority is not so open-ended and wide-ranging that it can muscle in as and when it chooses. It must have concrete evidence that something is amiss. We are attempting, as I am sure are the Government, to protect children from harm—to ensure that no under-18s play the category C and perhaps category D gaming machines.

Nick Hawkins: My hon. Friend will recall that I said in a debate this morning that organisations such as the British Beer and Pub Association had referred to making local authorities both judge and jury, which the Licensing Act 2003, with which my hon. Friend dealt in Committee, manages carefully to avoid. Does he agree that one reason why the BBPA is right to be worried about any legislation that says simply that authorities can act if they think that something is the case, is that it is terribly dangerous and moves away from the traditional way in which courts have previously considered issues such as this, and alien to the way in which our law has developed over the centuries?

Malcolm Moss: My hon. Friend makes an extremely valid point. I believe that the Government have realised that the words ''think that'' are probably  inappropriate, as they have struck out the clause in which they occur. They have not replicated the words in the new clauses. They have concluded that the wording is inappropriate and are seeking to address the matter in a different way, but even in new clause 18 we do not have the comfort zone—the back-stop—of a requirement for proper evidence, a proper hearing and an appeals procedure.

Nick Hawkins: My hon. Friend says that the Government have not replicated the words, but paragraph 15(1) of new schedule 2 states:
 ''The licensing authority which issued a permit may cancel it if they think that''. 
In fact, the Government have gone back to ''think that'' in the new schedule.

Bob Russell: They have had second thoughts.

Nick Hawkins: As always, I am grateful for the wit of the hon. Member for Colchester (Bob Russell).

Malcolm Moss: I am grateful to my hon. Friend for pointing out that wording in the new schedule, as I had not seen it. He is absolutely right, and the Government have not addressed an issue that is of concern to the industry. I hope that they will address it at a later stage. We shall have to wait for what the Minister has to say.
A new definition in new schedule 2, which deals with the pub gaming machine permit, caught my eye. Paragraph 1(1) states that the licence holder ''may apply''. I would have thought that such permits would be mandatory. In other parts of the Bill, one is breaking the law if one does not have a permit, so I do not know why the word ''may'' occurs in this instance. If someone needs a permit, they have to apply to get one. It would be interesting to hear the Minister's comments on why the word ''may'' is used in that sub-paragraph rather than the word ''shall''. 
Paragraph 5(1) states: 
 ''A licensing authority may not attach conditions to a permit.'' 
Again, some clarification is needed. It seems that the process simply involves stamping a piece of paper; in other words, if one applies for a permit, they will get one. If conditions cannot be attached in any way, shape or form, why bother applying for a permit in the first case? If applicants will not be examined, if their background will not be researched, why bother with a permit? 
Then we come to paragraph 9, which deals with fees. It refers to the payment of 
''a first annual fee to the issuing licensing authority within such period after the issue of the permit as may be prescribed''. 
In other words, one pays an up-front charge to the local authority for getting the permit, and then it 
''shall pay an annual fee to the issuing licensing authority before each anniversary of the issue of the permit.'' 
Every year it will cough up another fee—for the privilege of what? The local authority will certainly have recouped the cost of the initial processing of the permit. I am at a loss to understand why one has to pay an annual fee. Of course, the fee may well simply be a way of giving local authorities yet another income  stream, which I have to admit they drastically need, but it seems unfair on the permit holders that they have to pay an annual fee for the privilege of the permit. 
It would be fine if the local authority were to say, ''We need to send our man or woman out there to conduct spot-checks to see whether under-18s are playing the machines.'' I understand that that is a possibility. It would be helpful to have the point clarified by the Minister. If, on the other hand, local authorities acted only on evidence from members of the public or responsible authorities about misuse and illegal playing of machines, I see no reason why there should be a group of spies nipping around to have half a pint and checking whether children are playing a category C machine at that moment. We need more clarification on that. 
I turn to paragraph 21 of new schedule 2.

Don Foster: The hon. Gentleman is giving a detailed analysis of the new schedule. Before he jumps to the end, I ask him whether he shares a concern that I raised earlier with the Minister. Paragraph 10 says that
 ''An occupier of premises in respect of which a permit has effect commits an offence if without reasonable excuse he fails to produce the permit on request for inspection by — 
(a) a constable, 
(b) an enforcement officer, or 
(c) an authorised local authority officer.'' 
In those circumstances, does the hon. Gentleman not question, as I do, why the occupier is referred to when, in paragraphs 9(1) and 9(2) reference is made to the holder of the permit? The occupier of the premises could be a tenant, so it would be strange if the tenant was the person guilty of the offence that was a result of something that should be the responsibility of the holder of the permit. Does the hon. Gentleman share my confusion?

Malcolm Moss: I could not have put the point better. I am sure that the Minister heard that exquisite argument. The hon. Gentleman has raised an important issue. There are possibilities as to why a different word is used, but we ought to know the reason for the distinction between the holder of the permit in one paragraph and the occupier in another.
I was leaping forward to paragraph 21. It says: 
 ''A licensing authority shall— 
(a) maintain a register of permits''. 
For what purpose does it have to have a register of permits? Further on, the paragraph says that: 
 ''The Secretary of State may make regulations— 
(a) requiring licensing authorities to give to the Commission specified information about permits . . . 
(b) requiring the Commission to maintain a register provided to it''. 
So it goes on. 
This is bureaucracy gone mad. We are using paper at a rate of knots to achieve nothing. Most pubs have got one or two machines. Permits are given for a lifetime, unless the holder breaks the law, in which case the local authority will move in and remove them. Why do we need to keep a register of permits and pay somebody to keep that register up to date? Some parts of the new schedule defy logic.
I have covered most of my main points. At the heart of the matter is the need for pubs and licensed premises to have the comfort that a local authority or a particularly officious official in a local authority cannot muscle in and cause difficulties for them on a whim or because, based on his own thought processes, he believes something is amiss. Many pubs and licensed premises rely financially on the income from those machines. We need something tighter in the Bill so that licence holders have recourse to a procedure that is fair and equitable on all sides. We had that in the Licensing Act. I really do not know why the Government have not replicated that in the Bill. The new clauses and new schedule represent a complete change in the way in which this area of the Bill is written. Two clauses have been taken out. We have tabled amendments to achieve the ends that I have talked about. 
I will be prepared to withdraw my amendment if the Government are prepared not to press their changes. Earlier we heard that they may well amend the amendments and new clauses that they have tabled. If that is the case, why not leave the Bill as it is? We will not press our amendments, the Government will not press theirs and we can revisit the matter on Report when they have had a little more time to think about the issues. I understand that the consultations with the British Beer and Pub Association are proving extremely profitable on both sides. Perhaps the Government can come to some arrangement that satisfies all groups.

Don Foster: Will the hon. Gentleman reflect on what he has just proposed? We would have difficulty supporting one of his amendments—that relating to an automatic entitlement to four machines. I hope that he may be prepared to exclude that from the deal that he seeks to broker with the Minister on behalf of the Committee.

Malcolm Moss: I thought that I explicitly said that I would not press any of my amendments, including the one that seems to offend the hon. Gentleman.

Don Foster: I was seeking to point out that, were the hon. Gentleman unsuccessful in his negotiations with the Minister, I hope that he would not be minded to press that particular amendment to a vote at this stage.

Malcolm Moss: I am sorry. I misunderstood the hon. Gentleman. I am not setting a condition. It is an open-ended deal. The Minister can accept it if he likes, but I suspect that he probably will not. In the interests of getting proper and efficient legislation on to the statute book, the Government ought to reflect on the arguments that have been advanced. They have indicated some sympathy with—

Don Foster: The tenor.

Malcolm Moss: Yes, they have indicated some sympathy with the tenor and approach of the British Beer and Pub Association. It is in the Government's interest not to press the changes at the moment, but to reflect on them and to come back with something that does the job better for all parties.

Julie Kirkbride: I congratulate my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss) on a well argued case. He displayed a huge command of the detail of what the Government are proposing. I agree that those proposals are extremely flawed. I suspect that some of his experience was gained during the passage of the Licensing Act, which he took through the House on behalf of Her Majesty's Opposition and which had similar flaws to those in the Bill.
The thing that comes over most strongly is the bizarre bureaucracy that the Government wish to establish in relation to relatively innocuous gaming machines in pubs. The Government have a reputation for bureaucratising every aspect of our lives. Since 1997, regulation has come at something of a pace. The level of bureaucracy established in the new clauses seems, as my hon. Friend has suggested, completely unjustifiable and incomprehensible. 
That reflects the Government's obsession with the paper chase and creating jobsworths in local government without producing anything that is of any benefit to the public. Of course, someone has to pay for it, and we are worried—as with the Licensing Act—who that might be. To a certain extent, it will be the pubs, and I have great sympathy with their predicament. They are right to say that there are many threats to their profitability at the moment, coming largely from the Government's agenda. It is a vibrant sector, which must be successful if the Government's employment record is to be successful—they often like to tell us that it is. We need pub jobs. They are a good way of soaking up flexible employment opportunities throughout the UK.

Bob Russell: Soaking up?

Julie Kirkbride: Forgive me. I fear that, yet again, the Bill will be akin to the Licensing Act in damaging the pub industry throughout the UK. If it does not damage the pub industry by creating new licences that have to be paid for, it may end up attacking local ratepayers—a worse outcome for politicians—who are already exercised about council tax. Despite the Government's largesse in the recent Budget announcement, I fear that that will be a big issue in the run-up to the general election. Someone has to pay for what the Minister proposes in the clauses, and neither the pub industry nor council tax payers are fair targets. Both communities will be deeply unhappy when they realise what is in the offing.
The lack of a consistent case in the Government's arguments throughout the passage of the legislation is bizarre. When we first set out to allow a different style of casino in the UK—the Las Vegas-style casinos with category A machines—the Government were more than happy to allow the market to decide where those creatures would be placed. The Government spent an  awful lot of time on Second Reading saying that there was no problem and that the market would ensure there was no rise in the number of problem gamblers because of the proliferation of hard gaming casinos. They told us that we could rely on the balance between demand and supply to create a fairly benign environment. That was their argument concerning category A machines in regional casinos, as they have come to be called. 
The Government did not get away with that argument and they subsequently presented the option of just having 12—still too many in my opinion, but nevertheless it is a cap. If it was okay to limit the number of regional casinos, which are much more damaging beasts as far as problem gambling is concerned than category C machines in a pub, why cannot the argument apply to pubs? 
This morning, I questioned the Minister when he prayed in aid the experience of Australia. We are pleased that the Government are cautious about changing our gaming laws, having been to Australia to see what a complete disaster was brought about when it changed its laws on gambling. We are encouraged by their caution, but the worry in my mind is that the caution is misplaced. It did not exist with the important issue of category A machines, but it exists in spades with the fairly benign regime that has existed for many years in the UK. 
No one has ever suggested that there is a problem in pubs on the street corner that want to have or to keep gaming machines that are much less addictive in encouraging punters to play on them. Category C and D machines are completely different from category A machines. I would not mind how many casinos the Government allowed throughout the country if they were not proposing to put category A machines in them.

Clive Efford: The hon. Lady suggests that category C machines are less addictive than category A machines. On what does she base that statement?

Julie Kirkbride: I base it on the experience of America and Australia where there have been serious problems when category A machines have been introduced. In areas where casinos offer that sort of entertainment, problem gambling is much more prevalent in the local population than in areas with access to category C and D machines, which do not have gambling problems in their communities. Category A machines seem to have an impact.
The idea of regeneration and money to spend in those communities would not exist if money did not follow the introduction of category A machines. That happens only if more people are enticed to play them. Some people are enticed to play them without a problem arising, but for others it destroys their lives and the lives of their families. If the Minister had been to Earls Court not so many months ago, he might have seen a display of gaming machines. I had never been launched into such a different world as the one that surrounded me when I walked into Earls Court that day. Very clever people spend their lives producing  machines that are designed to entice players to spend more than they can afford, not just what they can afford. That is the point of them.

Nick Hawkins: It would be useful to put on the record the fact that my hon. Friend is, I think, referring to the Amusement Trade Exhibition International that the British Amusement Catering Trades Association organised at Earls Court.

Julie Kirkbride: My hon. Friend is assiduous about such matters. That was the exhibition that I visited. I am sure that he was also there but, sadly, we did not meet. He was also right to tell me that there will be eight and not 12 regional casinos, but that is still too many.
To return to my original point, the issue is the bureaucratic measures that the Government are seeking to introduce for pubs that want to have more than two gaming machines. Under the present benign regime for gaming in the United Kingdom, which offers plenty of opportunities and creates few problems in relation to those opportunities, the average number of gaming machines in pubs is just over one, although more are allowed. That means that many pubs throughout the country do not want machines, would not think of having them and would find that their clientele—I would be one—did not want to go into them if a wretched machine was dinging in the corner all the time. However, other pubs find them a useful way of maintaining reasonable profitability. 
The market has already decided that only a certain number of pubs would find gaming machines attractive and that many others would not go near them with a bargepole. Given that the market has already established that loudly and clearly for the Minister, why can he not see for once that the way forward is not to create enormous bureaucracy and a paper chase to restrict pubs to two machines? If a pub is changing and wants more slot machines, or a new pub is being introduced, there could be a simple rule that it could have up to four, because few would take up that offer. Those that did would almost certainly be allowed to have them anyway under the Government's procedures for bureaucratising the process. It is a demand-driven issue. We have already established that, on average, only one gaming machine exists in pubs. Why not let those pubs that attract a clientele who enjoy gaming machines have their four machines without creating such bureaucracy? The country pubs that do not want machines should not have to have them. From a historical perspective, the market has been shown to work. 
I hope that the Minister takes up the offer on the new clauses from my hon. Friend the Member for North-East Cambridgeshire. More discussions with representatives of the pub industry would be valuable. A much more reasonable compromise could be achieved, which would be good for everybody. It would be good for local council tax payers if we could cut the paper chase. It would be good for pubs to reduce bureaucracy—the average pub manager runs the gauntlet of bureaucracy every time he opens the  door to his customers. It would also be good for the UK if government in general stopped wrapping people up in red tape. It is a significant and potent charge against this Government that everything they seek to do, they seek to do by regulation, and by overly bureaucratic regulation. 
The measures under discussion are the perfect example of bureaucracy gone mad. I hope that the Minister has listened to the arguments from Opposition Members and to what the broad brush of Opposition want to do with the new clauses, despite our differences with the Liberal Democrats over details. I hope that he will think again on Report.

Peter Pike: May I make it absolutely clear in response to what has just been said that only one amendment, No. 369, has been moved? There are a number of amendments in the group. In accordance with normal practice Government amendment No. 360 is not selected—amendments to delete clauses are not selected, as I told the Committee earlier. I will put the question at the appropriate stage, when the clauses stand part of the Bill, and Members can vote against the amendments if they do not want them to be accepted.
Later, we will reach the Government amendments and new clauses in the group. They are being debated but they have not been moved. The Minister can say, if he wishes, what he intends to do at that stage, but those amendments have not and will not be moved during this debate. I hope that that clarifies the position for all members of the Committee.

Richard Caborn: I have great sympathy with the concerns of the hon. Member for Bromsgrove (Miss Kirkbride) about the proliferation of machines. She argued from a very good standpoint. Some of her arguments do not fit the conclusion, but we will leave that. It amazes me that here we are debating a permit, which probably includes a little bit of bureaucracy, but the amount of bureaucracy that will be removed has not been considered. I have referred to the Licensing Act 2003 on several occasions. In that legislation, we are condensing six licensing regimes into one. By any standards, that will save hundreds of millions of pounds over time, and that saving will, I hope, be reflected in efficiency and prices as well.
The Gaming Act 1968, again by any standards, is bureaucratic and draconian, but even if one wants only to change the amount of money put into a slot machine or the amount paid out as a prize, we in Parliament have to do so by statutory instrument. The aim in 1968 was to drive crime out of gambling, and as a result, one of the most draconian Acts ever—which included the casino licence, the most difficult licence to obtain—was put on the statute book. The authorities go back about four generations to ensure that there are no criminals in one's family, so it is a bit difficult to get a licence these days. Yet we are arguing about issuing a permit because it will supposedly bring down the industry. Quite honestly, I have never heard such  claptrap in my life. Hon. Members should stand back and look at what we are trying to achieve. We are removing bureaucracy; we are streamlining the system, which the industry has broadly welcomed; and we are modernising in a way that many people did not believe possible.

Julie Kirkbride: The Minister is being careful about what he chooses to draw the Committee's attention to. Even if I were to accept the Government's argument—I will in part, for the sake of this debate—the fact is that more bureaucracy could be removed and that would not be a bad thing to do. Therefore, if the Minister says that he is getting rid of some of it, that does not mean that he should not try a little harder to get rid of the other bits to which we object. If he were really being honest—I shall not press the indulgence of the Chair too much on this point—he would admit that the Government have introduced many other measures that the pub industry is upset about. The licensing of gambling is just one small part of the bureaucracy that has been the hallmark of this Labour Government.

Richard Caborn: I shall not go down that avenue. I should be delighted to discuss the leisure and hospitality industry, and what the Government have done to try to streamline it, modernise its skill base and bring it into the modern electronic age. There are many parts to the hospitality industry, and this sector is one of them. If one were to link it with tourism, the figures would speak for themselves. It is clear that the measure is about removing bureaucracy, and streamlining the sector and making it fit for the 21st century.

Julie Kirkbride: I wonder whether the Minister would let us know when he last had a conversation with Mr. Bob Cotton, who represents the leisure industry. I do not believe that he would tell the same story.

Richard Caborn: I probably speak to Bob Cotton every week.

Bob Russell: At the Sheffield trades and labour club.

Richard Caborn: Not at the Sheffield trades and labour club but in London. I work closely with Bob Cotton on the hospitality and tourism industry, and he is on the committee that I just set up for the implementation group on tourism. I speak with him on many occasions. Just to digress—

Peter Pike: Order. Please return to the amendments.

Richard Caborn: I just want to put it on the record that Bob Cotton's job on the hospitality for the Olympics was absolutely superb—first class. It is very good working with him. I shall now try to answer some of the specific questions that have been asked.
I understand the concern expressed by the hon. Member for North-East Cambridgeshire about the licensing authority's judgment when considering removing the exemption to allow gaming machines. However, I genuinely believe that it is right that an authority's use of judgment is not restricted. New  clause 18 goes further than clause 268 in setting out the steps that an authority must take when considering making an order to remove entitlements to gaming machines. It states that the authority must notify the licence holder of its intention to make such an order. It also states that the authority shall consider representations made by the licensee and hold a hearing if one is requested. If an authority decides to proceed with an order, it must inform the licensee in writing of its reasons for doing so. There is also a full right of appeal in the magistrates court against the making of an order. We believe that it is right to establish such checks and balances. 
On application for a grandfather permit, the licence holder will have to apply for a permit and pay a fee. The permit will be granted automatically. Just to give a feel for the figures—the hon. Member for North-East Cambridgeshire asked for them—the present fee for a permit is £32, and I would expect the new figure to be about that. 
The hon. Gentleman asked why no conditions would be attached to the permit. The application will confirm the appropriateness of the applicant. The permit itself is clearly defined and needs no conditions. 
The annual fee pays for enforcement and for inspections to ensure that there is not an excessive number of machines and that they are of the right category. Budd raised the problem of taxi offices and, to some extent, fish and chip shops and so on. The authorities had real difficulties policing such places. The problem had got out of hand, particularly in the capital, where some establishments were not even using what we now call category D or even category C machines. Some of the harder gambling machines were being found in some areas. The reason was that those areas were not properly policed, and we take responsibility for that. 
People are concerned about this type of framework, as demonstrated by the hon. Member for Bromsgrove, who is raising the issues. If we establish the structure, it must be properly licensed and policed. If it is not, the whole thing will fall into disrepute. To some extent, that is what happened before. It is something that we had to start pulling back on. People were putting all sorts of machines into taxi offices and they were never policed.

Malcolm Moss: I take on board the Minister's arguments about policing, but as far as pubs are concerned there has been no argument about any substantial breaking of the existing law on the number of machine permits issued under the old system through the magistracy. So why are we trying to mend something that is not broken?

Richard Caborn: As with many such things, there were, as the hon. Gentleman knows, no figures on that. We took a realistic approach to the issue. Premises will have grandfather rights, and the status quo will continue: if establishments have five or six machines, they will continue to have those machines. The permit will be granted automatically and the fee will be dealt with automatically. As I said, there is, on average, slightly more than one machine per establishment, and  we propose to allow establishments to have two machines. We think that that is right and we have, at least, established a generous baseline. Any establishment that wants to apply for more machines can do so. If they are refused, there are ways in which they can appeal.
That is an argument that will go on. We believe that we made the right judgment. Why did the trade organisation want to set the limit on machines at four and not at three or two? We have, at least, tried to argue our case rationally. The hon. Gentleman may not accept the rationale, but there we are. As Brian Clough always said, I am convinced that we are right. 
The hon. Gentleman raised the use of the phrase ''think that'' in the Bill. Counsel has considered those words carefully. We believe that they are simply plain English. They do not allow an authority to evade its normal decision-making responsibilities or process. It must consider all decisions properly. That is why ''think that'' is in the Bill and why paragraph 1 of new schedule 2 says ''may apply'' rather than ''shall apply''. It says: 
 ''A person who applies . . . for . . . or who holds an on-premises alcohol licence'' 
will be automatically entitled to two machines. They can also apply for more machines by way of the pub gaming machine permit. They do not have to apply for a permit if they do not want more machines. That is why ''may'' is used rather than ''shall''. 
Responsibility for compliance with the permit rests with the permit holder. Paragraph 1 of new schedule 2 explains who may apply for a permit. 
On removal of exemptions or machines, we are aware that new clause 18 does not replicate the words in clause 268(2), and will table amendments to address that. 
I move on to the register of permits. It is important for authorities to keep a record of the premises that have been issued permits under the Bill. That is to ensure the effective regulation of illegally cited machines. In the age of electronic registration, that should not be overly bureaucratic. 
The hon. Gentleman asked us to withdraw the amendments. We do not believe that that is necessary. We have developed the amendments and expect to add more, but we are confident that they do the job and do it well.

Malcolm Moss: Before we broke for lunch, I put a question to the Minister. He gave a response that I honestly do not understand and I would be grateful if he revisited it. Clause 267(7), which one of our amendments would have deleted, refers to
''a code of practice under section 23''. 
In other words, the gambling commission would presumably be involved, at a remove, in much of the process. 
At the time, the Minister referred to clause 16. He probably meant new clause 16. I cannot see where in new clause 16 that kind of relationship is referred to. If the Minister is unable to clarify the point now, perhaps  he could do so at a later stage or write to the Committee so that we understand exactly where the reference to codes of practice will occur.

Richard Caborn: It would probably be better if I wrote to the Committee.

Peter Pike: We are debating new clause 16 in this group.

Richard Caborn: Yes. I shall clarify the point in writing. If there is a fault, we will rectify it.

Malcolm Moss: I drew that to the Committee's attention because I followed what the Minister said last time, but I could not make it stack up. Either there is an oversight, in the sense that the code of practice has not been written into the new clauses, or the Government have taken our amendment and deleted the reference from the Bill, in which case we are very grateful, because we have not had to propose it.
As I understand it, it is up to me to withdraw amendment No. 369. I am disappointed in the Minister's response because he has said on more than one occasion that amendments in this group will be taken up on Report, so we have not yet got it right. To include the new clauses at this stage seems slightly premature, but we shall no doubt revisit the matter on Report. On the basis of our discussion, I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn. 
Question, That the clause stand part of the Bill, put and negatived. 
Clause 267 disagreed to. 
Clause 268 disagreed to. 
Clauses 269 to 272 ordered to stand part of the Bill.

Schedule 11 - Prize Gaming Permits

Amendment made: No. 178, in schedule 11, page 188, line 29, at end insert 
'except that in paragraphs 5 and 20(2) it means, where the application in question is made to a licensing authority in Scotland, prescribed by regulations made by the Scottish Ministers. 
 This Schedule shall, in its application to Scotland, have effect as if references to a chief officer of police were references to a chief constable.'. 
—[Mr. Caborn]

Malcolm Moss: I beg to move amendment No. 324, in schedule 11, page 190, line 21, at end insert
'for a period in excess of six months'.

Peter Pike: With this it will be convenient to discuss amendment No. 325, in schedule 11, page 190, line 24, at end insert 
 '(3) ''Occupy'' for the purpose of this paragraph shall mean to have one's place of business in, whether or not that business actually operates or is open to the public'.

Malcolm Moss: I will be brief. Paragraph 13(1) states:
 ''A permit shall lapse if the holder ceases to occupy the premises specified under paragraph 11(1)(c).'' 
We want to add the words 
''for a period in excess of six months''. 
A permit will lapse if premises are left unoccupied, but there may be very good reasons, such as seasonality or renovation, why occupation in the strict sense is not possible or is broken for a short period. We have asked for a period of six months to give a little leeway.

Don Foster: I was just reflecting on the sensible proposal made by the hon. Gentleman, and I wondered whether he shared my interest in the language used in the schedule. Does it imply that the holder of the licence is the occupier on this occasion? During a previous discussion, a distinction was made between the holder of a licence and an occupier. Had he noticed that?

Malcolm Moss: I did not notice it until the hon. Gentleman brought it to my attention. No doubt the Minister heard what he said and will reply if he so chooses.
Amendment No. 325 also refers to paragraph 13. It would add the words: 
 '''Occupy' for the purpose of this paragraph shall mean to have one's place of business in, whether or not that business actually operates or is open to the public''. 
We are attempting to define occupation. It may satisfy the hon. Gentleman, but not the Minister.

Richard Caborn: I thank the hon. Gentleman for his explanation of the amendments. I understand the concern that prize gaming permits should not be removed from a person who temporarily ceases to use the premises. However, the requirement for a six-month period is a little too rigid. We do not want permits for this sort of gaming to be in force when someone is not taking responsibility for the premises to which they relate. It is good legislative practice to ensure that if a permit holder ceases to occupy the premises, that permit lapses.
Whether someone ceases to occupy a premises will always be a matter of fact and degree. That will be judged by the licensing authority, which should be in a position to have all those facts. I am concerned that a six-month rule, as proposed by the amendment, would allow permits to continue even when it was clear that the premises had been abandoned by the permit holder, perhaps over a few weeks.

Mark Prisk: I wonder whether the Minister could clarify something. The question of occupation is important. He and the Committee will understand that there is a clear distinction between occupation and continued responsibility under a lease. Will he clarify the Government's view of the scope of the Bill and the implications of the amendment?

Richard Caborn: I was just about to come to that. I will now read the next paragraph of my brief. If the hon. Gentleman had waited, he would have got the answer. On the amendment that changes the definition of occupation, we want the word ''occupy'' to bear its natural meaning. We want the premises to which a permit relates to be the premises where the prize gaming is offered. I am afraid, therefore, that I cannot see any benefit to the change.

Malcolm Moss: I am prepared to negotiate on six months. The Minister said that he was sympathetic to the idea that there should be some kind of time limit. Perhaps three or four months would be better, but there may be circumstances—let us say that there has been an incredible fire on the premises that has gutted the place completely—when it may take up to six months to get people in. The insurance claim could go on and on before it was settled. The person then has to get the builders in to renovate the place. Are there other means in the Bill whereby some comfort could be given to operators that if they face those circumstances, their permit or licence would not be revoked as a result of lack of occupation?

Richard Caborn: I hear what the hon. Gentleman says. I am trying to work out whether that can be accommodated. Whether a long lease can be viewed as occupation—or a short lease or a freehold—is a question of fact as well as of law. The lease could still exist without occupation. If there was a fire which has gone out, the question is whether the lease continues. In law, the person still occupies the premises even though those premises have burned down. Therefore that person would continue to hold the permit. In law, the person still owns or leases the building despite the fact that it has burned down. That is occupation, so the holder continues to have the right of the licence or the permit. I do not believe that the hon. Gentleman's argument stands up.

Mark Prisk: It is important to tease out matters so that they are on the record. The Minister is being helpful towards that end. Reference has been made to a long lease. As the hon. Gentleman knows, the Government are keen to reduce that under legislation, possibly through the Department of Trade and Industry, but I shall not stretch the Committee's patience too far in that respect. Will he confirm that the lease, not the physical occupation, defines the responsibility?

Richard Caborn: I am advised that it could be either. It is worth testing the matter, but the rationale is that, presuming that the holder is law-abiding, clearly we do not want to put that person out of business if circumstances such as the burning of the building arise. We want to make sure that he is put back into business at the earliest opportunity. The drafting of the provision covers such circumstances. I reassure the Committee that the Bill will protect such a person. It will not protect the rogue operator, a provision with which I am sure we all agree. We want to leave the permits in operation for six months in case some difficulties arise. I hope that, on balance, the hon.  Member for North-East Cambridgeshire will be reassured by what I have said and withdraw the amendment.

Don Foster: I am conscious that the Committee wants to make a decision and that we may have to have a natural break soon. I raised in a slightly light-hearted way the issue of occupation, but clauses 271 and 272, which relate to the new schedule, make it clear that the person who has the permit is the person who is providing the facilities, not necessarily the person who is occupying them. The person providing the facilities could have a tenant who was doing the work.
Yet, under the schedule, the person who gets into difficulty is the occupier, not the person providing the facilities. When I referred to the matter earlier, I was being slightly jocular, but I am now being slightly more serious.

Richard Caborn: I think that it can be either. The occupier can be the person who owns the building and, thus, the operation.

Nick Hawkins: I have a helpful suggestion.

Richard Caborn: It will be the first one.

Nick Hawkins: The Minister is not being entirely fair when he says that, given that he accepted one of my amendments, albeit a long time ago. Will the Government go away and think about the issue again? If they did not use the term ''the occupier'' and returned to the other terms of art that already exist, such as ''the personal holder'' and ''the premises licence holder'', there would not be the danger of the confusion that is felt not only by the hon. Member for Bath (Mr. Foster), but by my hon. Friends and the British Beer and Pub Association. If, rather than blurring the issue by referring to occupiers, which may have one meaning or another, the Minister referred to premises licence holders or personal holders, that might solve the problem.

Richard Caborn: There is no disagreement in Committee. We all agree on the object of the exercise, although the wording may need to be revised. I have put forward a clear case, which members of the Committee do not accept. I shall take away the matter to see if we need to alter the wording—not the intention—to make it clear. I shall consult counsel.

Don Foster: The Minister is taking a sensible step. He will examine the definition in paragraph 1 of the schedule, which refers only to ''holder'', not to ''occupier'', which is not defined there or anywhere else in the Bill. I am sure that the Committee will adopt his approach.

Richard Caborn: I try to inject an element of common sense into our proceedings from time to time. Whether counsel will accept it is a different matter. I shall ask my officials to examine the matter and we will return to the matter if we can. For the record, I do not think that there is any difference between us in what we are trying to achieve. If we can make the provision clearer  by rewording it, we will try to do that. I think that I have given a reasonable explanation, and that may be sufficient, but I will revisit the matter.

Malcolm Moss: I am grateful for the Minister's assurance that he will look at the matter again. We have put certain words on the record, and people who are involved with gaming permits can read Hansard and decide whether the Opposition's interpretation or that of the Minister is right and appropriate. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. 
Sitting suspended for a Division in the House. 
On resuming—

Peter Pike: Order. Before we move on, I point out that there will be more Divisions in the House. They can happen at any time, but they will certainly take place from half-past 5 when there will be a series of them, so I hope that the Committee will adjourn before that.
Amendments made: No. 179, in schedule 11, page 190, line 25, leave out 'he'. 
No. 180, in schedule 11, page 190, line 26, at beginning insert 'he'. 
No. 181, in schedule 11, page 190, line 27, at beginning insert 'he'. 
No. 182, in schedule 11, page 190, line 29, leave out 'or'. 
No. 183, in schedule 11, page 190, line 30, at beginning insert 'he'. 
No. 184, in schedule 11, page 190, line 31, at end insert 
', or 
 ( ) sequestration of his estate is awarded under section 12(1) of the Bankruptcy (Scotland) Act 1985'. 
No. 185, in schedule 11, page 190, line 42, after 'bankrupt),', insert— 
 '( ) the holder's interim or permanent trustee (in the case of an individual holder whose estate is sequestrated),'. 
No. 186, in schedule 11, page 190, line 44, at end insert— 
 '( ) In relation to premises in Scotland— 
(a) sub-paragraph (2)(a) shall have effect as if it referred to a sheriff within whose sheriffdom the premises are wholly or partly situated, 
(b) sub-paragraph (2)(b) shall not have effect, 
(c) the reference in sub-paragraph (3) to a magistrate's court shall have effect as a reference to the sheriff, and 
(d) the reference in sub-paragraph (3)(d) to costs shall have effect as a reference to expenses.'. 
—[Mr. Caborn]

Malcolm Moss: I beg to move amendment No. 328, in schedule 11, page 193, line 25, leave out sub-sub-paragraph (e). 
This amendment is very interesting, because I tabled it some time ago, before the Government tabled their new clauses and amendments to clause 267, which we have just debated. My amendment would delete from paragraph 22(4)(e) of schedule 11: 
 ''The Secretary of State may make regulations . . . excusing licensing authorities, wholly or partly, from compliance with sub-paragraph (1).'' 
Lo and behold, sub-paragraph (1) states: 
 ''A licensing authority shall . . . maintain a register of permits''. 
We have just had some new clauses stating that there must be a register of permits, without the proviso in paragraph 22(4)(e) that a licensing authority can be excused from having such a register. I wondered why there was inconsistency in the Bill yet again.

Richard Caborn: I agree that the local authority should be responsible for maintaining a local register of permits issued. However, we would not wish to maintain the requirement for ever if it were the case that a nationally run register organised by the commission turned out to be more effective than the local register, or it became evident that local registered permits were not required and served no purpose. That is an example of our building in options to lift the administrative burden if it turns out that the extra red tape serves no purpose.
We have no plans to remove locally organised registers unless the commission takes over the task, or there is general agreement that the register is not needed. Paragraph 21(4)(e) of new schedule 2 contains the same power to excuse licensing authorities from compliance. I hope that with that brilliant explanation of why we need the registers to start with, but are still being flexible—what the hon. Gentleman might call future-proofing—he will withdraw the amendment.

Malcolm Moss: I am grateful to the Minister for pointing out where the words appear in new schedule 2. I got there marginally before he did, and as they are there I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. 
Schedule 11, as amended, agreed to. 
Clause 273 and 274 ordered to stand part of the Bill.

Clause 275 - Fairs

Question proposed, That the clause stand part of the Bill.

Mark Prisk: The purpose of my contribution is to seek clarification, which I am sure the Minister will be able to provide. The clause states:
 ''A person does not commit an offence under section 30 or 34 by providing facilities for equal chance prize gaming if—'' 
and then lists three specific conditions. I am concerned about paragraph (c), in which the condition is that 
''facilities for gambling (in whatever form) amount together to no more than an ancillary amusement at the fair.'' 
I know what an amusement at a fair is, but will the Minister clarify the scope of the term ''ancillary amusement''? It is an important point in relation to the  nature of the fair's business, and if the Minister will enlighten us about that, the whole Committee will benefit.

Richard Caborn: A funfair's rides and shooting ranges represent the majority of what it does. The gambling element of what it does would be ancillary.

Mark Prisk: The Minister is being very helpful. He referred to the majority of what fairs do. Is that in terms of value, by which I mean turnover or profit, or in physical terms—the number of amusements that constitute the fair?

Richard Caborn: That is a judgment to be made. ''Majority'' could refer to value or volume in judging what is ancillary. I am trying to get my mind round what would happen if the betting was marginally larger in volume. At the moment, there is a test under the Lotteries and Amusement Act 1976, and it may well be that that test could apply in this case. The next question is: what is the current test? I have no doubt that if the hon. Gentleman refers to the 1976 Act, he will find out. I have answered his question before he asked it.

Mark Prisk: The Minister said that he anticipated that the test will probably be similar to the one in the Act. Does that it mean that it will be the same? He will understand that we are trying to ensure that the record is clear so that, although there may be a deficiency in the Bill, our deliberations will clarify the matter. Is the test in this Bill the same as the one in the earlier Act to which he referred?

Richard Caborn: Yes, there is the same meaning as in the 1976 Act. I have no doubt that hon. Members will refer to that Act to see what the current test is.

Don Foster: Give us a clue.

Richard Caborn: I will not: I will leave hon. Members to research that themselves.
Question put and agreed to. 
Clause 275 ordered to stand part of the Bill. 
Clauses 276 to 278 ordered to stand part of the Bill. 
Schedule 12 agreed to.

Clause 279 - Exceptions to offences

Question proposed, That the clause stand part of the Bill.

Malcolm Moss: One aspect of the clause is causing concern and consternation in particular quarters. Subsection (3) reads as follows:
 ''A person does not commit an offence under section 30 or 34 by making or accepting a bet, or by offering to make or accept a bet,''— 
then come the crucial words— 
''if he acts otherwise than in the course of a business.''
I understand that those words are included in an earlier Act of Parliament, under which acting by way of a business, in so far as those activities are concerned, required a bookmaker's permit. However, I also understand that the words are not defined in the earlier legislation. The absence of any definition is at the heart of the current concerns. 
The lack of that definition is particularly important in the context of betting exchange customers, who, although not holders of bookmaker's permits—or, in future, operating licences—can, it is said by some, operate as bookmakers through the medium of a betting exchange by arguing that they are acting privately and in that sense not acting in the course of a business. 
I have no definition to offer the Committee myself. I would not say that this is a grey area, but it is an area of contention. The Government have included the words in the Bill and, depending on how they are interpreted, they can affect two major businesses in this country. Historically, bookmakers have taken bets in the traditional way and paid the general betting duty and, in the case of horse racing transactions, the statutory betting levy. However, the ongoing costs of running their business are well known. On the other side of the argument are the betting exchanges, which are a fairly recent development. They are expanding incredibly rapidly and doing excellent business. They may well be the future. People may not bother to get in their car or walk down the high street and nip into their betting shop; they will simply sit at home operating their computer. 
Have we got a level playing field and fair competition between those involved in the betting industry? There are the traditional bookmakers, to whom legislation that involves considerable costs of one kind or another has applied for a long time, and there is the new phenomenon of betting exchanges. I am no expert on these matters, but such exchanges would argue that they do not have the bookmakers' margin and do not gain massively from the activity. They probably take a small turn on the transactions—perhaps 2, 3 or 4 per cent.—that will not be as large as the bookmakers'. In making their book, bookmakers always build in a margin, so that they rarely lose out seriously. 
I do not know whether the two activities are that different. As a layman, I think that, if someone sits at home laying off bets that other people take to an exchange, they may lose their house, but they may win a lot of money. The skill is in knowing what prices to offer and what to bet off. If someone is making a small fortune from their activity on the exchange, when and how—at what point—would that cross a threshold and trigger the definition 
''in the course of a business''? 
The Government have not yet addressed that. During discussions, they have more or less said, ''We do not know the answer. We will allow the gambling commission to sort it out later.'' That is as helpful as nothing to those involved. We shall return to the issue  on Report, and it is a key question for debate in the other place. We need some flesh on the bones of the definition of the phrase 
''in the course of a business''. 
I am not arguing for one side of the industry against another. I have listened to both sides of the argument, but I am not an expert. However, I am here to scrutinise legislation and to ask questions about the meaning of words in the Bill. People who run such businesses say to me and other Opposition Committee members—no doubt to Government Committee members as well—that they have real problems with that definition because it could set up an uneven playing field, be discriminatory and attack the capital worth of their businesses and their revenue income. It may promote the new businesses, so that they have an advantage. 
I do not know the answer to such questions, but I believe that the Government should have such answers and should not leave the matter for the gambling commission to decide at a remove. The uncertainty is such that the period implied—I suspect that it will be two years before it all kicks in—is unacceptable for businesses on both sides of the argument. It is important that the Government make some effort to define what the phrase really means and how it will impact on businesses on both sides of the argument. We shall come back to this point.

Richard Page: I want to follow my hon. Friend in saying that I am not coming out on one side or another. We are all seekers after definitions and truth, rather than people advancing particular arguments. The definition of a business occupied the scrutiny Committee for a considerable and inordinate time. It was obvious fairly quickly—even to somebody of my advanced years—that the Committee operated from a basis of extreme ignorance.
I discovered that nobody on the Committee had a betting exchange account, although a number had a bookmaker's account. In the spirit of true public service, I opened an exchange account to gain first-hand experience of how it worked. I applied to the Committee for a refund of the expenses involved in the gambling on and operating of the account, but that was refused. That was most unacceptable. One of the troubles of speaking like this is that Hansard will record these events and my saying that it was absolutely dreadful not to be given any expenses to operate an exchange account, whereas, obviously, hon. Members all realise that I am joking—don't they? Well, I think they realise, Mr. Pike. 
It has become fairly obvious that we are operating two different systems. To become a bookmaker, you have to be licensed and to go through a series of probity tests. You take the customer's money, hold it in trust and are required to pay out at the end of the day—not that I am suggesting that you are a bookmaker, Mr. Pike, but you can appreciate the argument that I am advancing.
A bookmaker operates depending on what odds he quotes. Because he makes a book, at the end of the day, he may make 5 per cent. or 10 per cent. of the money he takes in. If he takes in £100 on the race, with any luck, whatever he pays out, he will put £5 or £10 in his pocket. If one goes to Brighton for a two-horse race, one will never find a bookmaker quoting evens on both horses. There is always a shade of the odds to leave the bookmaker with a small amount in their pocket. 
Betting exchanges work on a different basis. When one puts one's money on a betting exchange—it is the equivalent of acting as a bookmaker—the overall book is designed in such a way that, if one were to lay that book, one would not win but lose. One's monies would gradually depreciate round after round and one would end up bankrupt. There is a choice: either lose to the betting exchanges round after round, or lose to the bookmakers round after round. The result is the same. 
The bookmaking industry has become concerned about whether people are using betting exchanges to gain an unfair advantage. If a bookmaker uses the betting exchanges, he should declare it. He should say, ''This is part of my business. This is part of the trading that I do back and forth against my book.'' A bookmaker could gain considerable advantage by using betting exchanges but, in fairness, whatever profits they make, they have to pay part towards the levy and part towards the tax, which all other businesses must do throughout their operations. 
A betting exchange simply takes a turn and acts as the conduit between the money coming in and out. The exchange will take a small amount—perhaps 2, 3, 4 or 5 per cent., depending on the exchange—on which a levy and a tax will be paid. The exchange will have a much greater turnover but, in ratios, make a much smaller amount of money. It will make a turn and, in theory, unless it behaves in a completely crazy fashion, and there are one or two relatively new betting exchanges that have behaved irresponsibly, it will not go bust. 
Conventional bookmaking is quite legitimately asking the question that my hon. Friend the Member for North-East Cambridgeshire has asked: what is the definition of a business? There may be some bookmaking businesses that are not declaring what they are doing, and some may be using exchanges and knowledge in an underhand and covert fashion. The exchanges are, however, evolving a code of practice that they can put on record and use in conjunction with Customs and Excise and, in the fullness of time, the gambling commission, in order to ensure that everything is run cleanly and above board. 
I do not know the extent to which an overseas bookmaker can tap into the system and use the exchanges and money from abroad to offset their book and to obtain an advantage. What I do know is that the number of people using betting exchanges is growing and the money coming in from overseas is growing. I understand that it is now around 20 per cent. One of the arguments for the Bill is that we need it to deal with new technology and all the changes that have taken place in this modern world.
That was the question put early on to the scrutiny Committee. It was asked what it saw as the definition of a business. It started off by making a number of recommendations but, as more and more knowledge emerged, it decided to throw the matter back to the Government. That is exactly what I am doing and what my hon. Friend is doing.

Don Foster: I have listened to the hon. Gentleman with considerable interest. He clearly has a much better understanding of how exchanges operate than I do. I will tell him privately my experience of trying to understand them.
In a nutshell, after the hon. Gentleman's lengthy contribution, is he merely asking the Minister to say whether an individual or organisation who lays bets on an exchange is or is not a business? If that is the gist of his question, we could ask the Minister for an answer and then move on.

Peter Pike: Order. Before I call the hon. Member for South-West Hertfordshire (Mr. Page), I must tell him that he is pushing me to the extreme. I am listening to him carefully. The clause covers exceptions to offences and, so far, he is in order, but he is pushing me to the limit, so perhaps he will keep himself in order.

Richard Page: I would never want to push you to the limit, Mr. Pike.
I must apologise for not making the point more clearly. Because of the open audit trail of betting exchanges, it is easier to trace and to identify offences, but there is concern that all is not fair and above board and that all is not cricket, which is why I have been going through the scenario for the Committee. The hon. Member for Bath—I was going to say my hon. Friend.

Richard Caborn: It is getting a bit like that.

Richard Page: One never knows. After the next election—[Interruption.] Is the Minister going to intervene or is he getting a drink?

Richard Caborn: I am getting a drink.

Richard Page: After the next election, we may need the support of my hon. Friend the Member for Bath to drive this great nation forward to even better and other things, or we may not.
To return to where we were. The Government need to go beyond what is in the clause. We want to understand the thinking behind the Government's way of going forward. It is not just a definition of a business that is needed. What will be the definition of customers who use betting exchanges? Will there have to have a certain volume of activity and transactions for registration? What will happen if there is a large overseas bet? Will that require any record keeping? Will passports and utility bills have to be provided to discover whether money laundering is involved? This is a can of worms and the Government must provide clear guidance for the industry on where we go from here.
You are right, Mr. Pike. The question, ''What is a business?'' is just the tip of the iceberg. The Government have avoided tackling the problem in the clause. They have ducked it, but I am now looking the Minister fair and square in the eye—it is no good him grinning and smiling at me—and asking him how he will deal with the severe problems that will arise.

Richard Caborn: If that were the tip of the iceberg and we kept going, the iceberg would melt. I was going to quote another metaphor about cricket and taking a catch, but, as a good Yorkshireman, I will not.
The clause allows people to take part in and provide facilities for private betting and gaming, as defined in schedule 12, without committing an offence under the Bill. It is important to ensure that the Bill does not outlaw perfectly acceptable gaming and betting that takes place in private. The limits under the existing law are being preserved. 
Subsection (3) contains protection for those who bet but are not doing so in the course of a business. It allows people to place bets using the services of a betting operator or a betting intermediary on a non-commercial basis without the need for a licence. It also allows private bets between friends and others to take place without any need for authorisation and without committing an offence. 
I shall try to answer some of the specific questions that have been raised. The issue is not an easy one. As the hon. Member for Bath said, it has been bouncing around. 
First, on the money limits to which hon. Members referred, precise boundaries would not be helpful as there will always be people who bet recreationally but in large amounts—people will know who they are. They would be caught, whereas people who want to evade a limit could always find a way to come under the threshold. Therefore, we do not believe that money limits would be helpful. 
Betting exchanges are licensed as bookmakers under the same test. The Bill provides a specific licence with a specific test that protects the consumer. As the hon. Member for North-East Cambridgeshire acknowledged, bookmakers already live with a business test in section 55 of the Betting, Gaming and Lotteries Act 1963. The test is defined in that Act. 
Otherwise, 
''in the course of a business'' 
is a question of fact. It will be about the amount of activity carried on and whether the person holds themselves out for business. Given the possible variations, we think that it would be best to leave the matter for the commission. It is difficult to come up with a foolproof definition of all circumstances, as the hon. Member for North-East Cambridgeshire said. Therefore, we need a combination of common sense and flexibility, which is why we believe that the new  commission, which is the regulator, ought to and will have powers to make a decision on 
''in the course of a business''.

Mark Prisk: Presumably, therefore, someone must demonstrate that they are making or are seeking to make a profit from the activities.

Richard Caborn: Not necessarily. In the course of business, the person running the business is one consideration. The people who are laying the business also need protection, so I would not think that the definition would rely solely on whether they make a profit on a particular transaction.

Mark Prisk: So someone who is self-employed, who clearly is not an enterprise in the corporate sense, would be included in the definition.

Richard Caborn: Yes.
Bookmakers based abroad should be licensed in that country. If they are based here and are acting in the course of business, they need an operating licence. Again, if someone has an operating licence here, they can advertise and do all sorts of things. If they are licensed abroad and trying to ply their business here, they will not get the same advantages as a business licensed in this country. 
How are users who act in business identified? The commission and betting exchanges will work together to identify parties who may be using exchanges to run a business, and a commission code of practice could also be developed.

Richard Page: I am sorry to ask this just as the Minister is drawing to an end. We have a real problem, in that one cannot lay a book on a betting exchange. A bookmaker can make a book because they can actively control the odds, whereas on the betting exchange the odds are on the screen, and one has no control over them. That is a fundamental difference.
The worry is whether there are people who are able to manipulate those figures from outside and using outside influences that may not always be honest—hence, my question about overseas bookmakers. Bookmakers in this country who are using betting exchanges and not declaring that are doing something unlawful, and they would be in severe trouble if they got caught; they could lose their bookmaker's licence. However, with regard to the other systems I am talking about, I wonder whether we should try to get some definition a little ahead of the gambling commission coming forward because, as my hon. Friend the Member for North-East Cambridgeshire says, that could take two or more years.

Richard Caborn: I think that I follow the logic of that. The hon. Gentleman is saying that people would want to lay bets from abroad on to the exchanges, and he is asking whether that would be in breach of the law. One would have thought so. The hon. Gentleman's premise  for his scenario is that odds cannot be given on the betting exchanges. That is not true; odds can be offered on the betting exchanges.

Richard Page: No, I did not say that.

Richard Caborn: I thought that the hon. Gentleman did say that.

Richard Page: I thank the Minister for giving way. If someone goes to lay a bet on the betting exchanges, there are odds. If someone were to go through the piece of all the odds being offered, whatever happens—and we assume that they get the winner or loser as the case may be—if they had invested £100 they would come away at the end of the day with £92. They would not come away with £110. That is because in these circumstances a book cannot be laid in the same way as a bookmaker can make a book. At the end of a race, a bookmaker should be able to put some money in his pocket because he has got active control of the odds. However, if one goes on to the betting exchanges, one cannot control the odds; they are there for an individual to accept or reject. That is the difference.

Richard Caborn: That might be the difference, but I do not know what point the hon. Gentleman is making. Someone might want to have a fixed-odds bet and the bookmaker might want to make his 5 per cent. or 10 per cent., but as far as I understand it on the betting exchanges it is those who are matching the bets up who get the commission in any case. Are we talking about the definition of what a business is, rather than trying to define what the betting regimes are—whether they are fixed-odds or on the exchanges? I do not follow the argument; I do not even know the question that the hon. Gentleman wants me to answer.

Richard Page: I fully accept that my inarticulate stuttering has not got through to the Minister, and I apologise for that. What I am endeavouring to say is that if one uses the betting exchanges to lay bets, it is impossible to run a business that will not eventually go bust, and, as I understand it, the objective of most businesses is to make a profit. That is why my hon. Friend the Member for North-East Cambridgeshire has perfectly legitimately asked whether the Minister would care to develop the definition of what is a business so that we can see where this is all leading, because the scrutiny Committee initially got itself into quite a muddle on the matter and, listening to the Minister, I can understand why.

Richard Caborn: I can understand why it got into a muddle, because I have been got into a muddle as well.
I will try to deal with this. It is not possible to have a book on a betting exchange. I do not know where the hon. Gentleman is coming from and what he is asking me to define. I have defined what a business is, according to the legislation. I have also tried to explain how that applies to the exchanges and the bookies. There are some grey areas, and I have said that, within the context of this legislation, the regulator, with a dose of common sense on one hand and realism on the other, should be able to make a judgment; that is what the regulator is there for.
I have tried to give a definition of business and of exchange—and of exchange with regard to the bookies as well. I believe that my explanations will hold up well when the legislation is enacted.

Malcolm Moss: We have had a reasonably good debate. I am not a betting man but I suspect that if people were listening to the debate and offering odds on whether the industry is any wiser at the end of it than it was when we started, generous odds would be given.
There is no definition in the 1963 Act. The same words are used, but no definition is given. That is the point that I made. We are no further forward than we were then. There may be an accepted definition or appreciation of what the words mean. It would be helpful to hear that from the Minister—whether the definition has been tested in court, there is case law on it, or whatever we need. It is my understanding that no clear definition is given in the 1963 Act or in the Bill. 
The Minister agreed that the issue was contentious and difficult, that there were grey areas and that there was a division of opinion in the industry. However, he was determined to leave the issue to the gambling commission. I think that doing that is a cop-out. The attitude is, ''There are problems, so we'll leave them to one side. Let's not get too fazed about it.'' These provision will affect some of the biggest businesses in the country and allow an unelected group—of which nobody knows who the members will be—to decide the fate of such businesses on the basis of the definition of the words in front of us. 
The Minister also suggested that somebody operating on a betting exchange might be trading—if that is the word—by offering bets on a regular basis. That person might be turning over huge amounts. Is the Minister saying that that does not matter because it is a private transaction between individuals at either end of a terminal? It would be helpful to know whether that is the definition. 
Is running a business to do with advertising? Is it to do with running accounts? Should people be registering as a limited company or as a trading partnership? Those who do not wish to be caught up in a net of taxation or a levy, or to pay for the privilege of having a licence, will obviously not be communicating those factors to anybody. The betting exchange might give them the opportunity to trade on a massive scale. They take their losses as well as their gains. If the Minister is happy for somebody to make huge amounts of money doing that, let us hear him say so. If advertising is a component of running a business, then people are also off the hook if they do not advertise. That area must be addressed at some point. It is not best left to the gambling commission a few years hence.

Richard Caborn: To a large extent, the hon. Gentleman answers his own question. On one hand, he wants everything to be laid down in the Bill, including the definition of business. On the other hand, he asks how we will deal with circumstances that may arise. What we have said is that, to future-proof the Bill and make sure that we can respond to the new electronic age, where information is passed electronically at a speed  that would have been unimaginable 20 or 30 years ago, we must provide flexibility and powers so that a body that can respond to those circumstances as they arise.
The example that the hon. Gentleman gave was that, if the commission believed that someone was working outside the confines of the law and what is laid down in the Bill, it would have the power to intervene. I do not see anything wrong with that. The ultimate responsibility is with Parliament. As I have said, again and again, we are taking what was in the 1968 Act and enshrining it in a much more flexible way—taking the principles but making them more flexible and moving them into a modern setting. In doing that, we must invest some sovereignty in the regulator—the gambling commission—to allow it to deal with the fast-moving world in which we live. I see nothing wrong with that as long as the accountability lies with Parliament, which it does. We have therefore got the right to intervene. 
This is a classic example of where, if we were to try to tie the matter down in the Bill, we would be outmanoeuvred in the space of a few weeks by those people who are incredibly bright, incredibly flexible and who will take Parliament all over the place. That is why we want experts in a regulatory position with powers to act fairly quickly if the need arises. That is why we are doing what we are doing. 
Question put and agreed to. 
Clause 279 ordered to stand part of the Bill. 
Clauses 280 to 283 ordered to stand part of the Bill.

Clause 284 - Misusing profits of non-commercial prize gaming

Amendment made: No. 166, in clause 284, page 125, line 21, at end insert— 
 '( ) In the application of subsection (4) to Scotland the reference to 51 weeks shall have effect as a reference to six months.'.—[Mr. Caborn.] 
Clause 284, as amended, ordered to stand part of the Bill.

Clause 285 - Enforcement officers

Question proposed, That the clause stand part of the Bill.

Nick Hawkins: I want to make a brief contribution, because I am always a bit worried whenever a Government—and, perhaps, particularly this Government—introduce new kinds of enforcement officers. This Government probably already hold the record, after seven and a bit years in office, for imposing more and more inspectors, officers and different kinds of people to operate their nanny state.
I have been quite involved in some of the discussions that we have had in Parliament on the security industry. I was the shadow spokesman on the Bill that  became the Private Security Industry Act 2001. The right hon. Member for Walsall, South (Mr. George), has the distinction of being the Chairman of the Select Committee on Defence and has a long-standing interest in the security industry, as have I. We were asked to form a new all-party group on that industry, and many hon. Members from all parties became members of it. 
We need to press the Minister on whether there are safeguards to subsection (1)(b). Under subsection (1)(a), the new gambling commission will 
''designate employees of the Commission as enforcement officers for the purposes of this Act''. 
I can see the logic of that, but I am much more worried about the wider implications of subsection (1)(b), which states that the commission 
''may appoint persons other than employees of the Commission as enforcement officers''. 
 There does not seem to be any limitation on that. The commission can apparently designate anybody as an enforcement officer. That seems an astonishingly wide power and it would be helpful if the Minister would put on the record today exactly the kind of people whom the Government envisage might become enforcement officers, other than employees of the commission. 
I do not have any problem with the payment to enforcement officers, but we ought to get a little more on the record about what the Government have in mind about a whole new class of people called enforcement officers under this legislation.

Richard Caborn: For clarification, let me say that the people referred to are the gambling commission inspectors, who will replace the current Gaming Board inspectors. I hope that that helps the hon. Gentleman. The inspectors will move from being the Gaming Board inspectors to becoming the gambling commission inspectors. We envisage that the people mentioned in subsection (1)(b) are likely to be seconded from other regulatory agencies, such as Customs and Excise. We are moving from having Gaming Board inspectors to having the gambling commission inspectors and the other persons who have been referred to will be seconded from other regulatory agencies from time to time.

Nick Hawkins: The Minister is clearly suggesting that the only class of people who will have to be appointed under subsection 1(b) are those who already carry out policing-type functions for other bodies. If that is so, I am somewhat reassured.

Richard Caborn: They will be those with policing and regulatory functions. As we said, we are in the electronic age, so we may well have to bring in IT experts, too, for example. Such experts would not necessarily be enforcers or regulators, but might need to be brought in to investigate a particular piece of equipment. In the recent past, one or two people have tried to bring electronic equipment into casinos.

Nick Hawkins: I am grateful to the Minister for that. Will he give a further reassurance that the new gaming commission will provide a code of practice on the kind of people who can be seconded or authorised as enforcement officers, whether they be IT experts or whatever? I just want that reassurance because we are talking about a new body.

Richard Caborn: I would expect that anyone with regulatory or policing duties would be covered and would need the type of clearance required by the Security Industry Authority and security industries. It is right that the Bill should make sure that they were fit and proper persons.
Question put and agreed to. 
Clause 285 ordered to stand part of the Bill. 
Clause 286 ordered to stand part of the Bill.

Clause 287 - Suspected offence

Richard Caborn: I beg to move amendment No. 411, in clause 287, page 127, line 15, leave out subsection (5).

Peter Pike: With this it will be convenient to take Government new clause 19—Inspection: powers of entry: person accompanying inspector, &c. Mr. Caborn: The Government have ensured that the regulatory powers in the Bill are robust and sufficient to enable those enforcing the new regime to undertake their duties effectively. New clause 19 is no exception. The clause enables constables, gambling commission enforcement officers and authorised persons to take additional persons with them when entering premises under part 15 of the Bill.
It is important that those with regulatory responsibility have access to the necessary resources or specialist assistance in order to do their jobs. The amendment therefore enables constables, enforcement officers and authorised persons to be accompanied by technical or software specialists, or by persons needed to gain access to particular parts of the premises. Previously, additional persons could enter premises only when accompanied by a constable or enforcement officer, reliant on a warrant issued under clause 287(5). New clause 19 makes subsection (5) unnecessary, and amendment No. 411 therefore removes it.

Nick Hawkins: I am rather concerned about new clause 19, and I can show why with a recent example from my constituency. It involves a pub landlord of what was not in any sense a problem pub, but a pub in a quiet residential area—it might even fall under the definition of a gastro-pub, the term that so puzzled the hon. Member for Colchester (Bob Russell) this morning. There are a number of good gastro-pubs in my constituency, but this particular pub has a reputation for very high standards.
The licensee raised a concern with me about his premises being invaded, as he put it, by a whole raft of people one evening. The licensee was not there, but he was soon summoned by the manager on duty. He was  not able to find out who all those people were. It turned out that some of them were investigating whether anybody working at that pub might have been in the country improperly, which is entirely laudable. When all the checks were done, it was found that all the employees had been properly dealt with by the immigration authorities and were legally entitled to be in the country and work here. Nevertheless, that raid took place and it took about three months, even with my involvement, to get to the bottom of who those people were in that large group that entered the premises, because they were not prepared to identify themselves to the licensee's manager or to any of the people running the premises that night. 
The licensee rightly said to me that there ought to be something in English law—like the phrase that we were brought up with that an Englishman's home is his castle—saying that if Government inspectors are going into a premises, even with a laudable objective, they ought to be clearly identified as having a legitimate right to be there. That was not specifically a raid on amusement machines, or anything to do with gambling, but it might have been. 
New clause 19 introduces a blanket power, allowing constables, enforcement officers or authorised persons under clauses 285 and 286, which we have already agreed, to take one or more persons with them without saying who they are. That is cause for concern, because people running any kind of business are entitled to know that the only people who may enter their premises are those with official status. It is okay if they are enforcement officers and carry cards, as I am sure that they will have to, saying that they are properly employed as enforcement officers. I was pressing the Minister on that and he was able to reassure me. Similarly, if they are authorised local authority officers under clause 286, they would have some identification. However, new clause 19 would introduce the opportunity for Tom, Dick and Harry to come along with whoever they like as authorised persons.

Richard Caborn: Rather than waxing lyrical, perhaps the hon. Gentleman will look at clauses 301 and 302, because the answer is there.

Nick Hawkins: Clause 301 says:
 ''An enforcement officer or authorised person . . . must produce evidence of his identity and authority''.

Richard Caborn: What about clause 302?

Nick Hawkins: That says:
''regulations requiring a person who exercises a power . . . to provide information about the power and its exercise . . . form and manner''. 
That is fine. It deals with constables, enforcement officers or authorised persons, but not with the other persons introduced by new clause 19. I wait to hear what the Minister has to say, but I hope that he will understand that, in the case that I quoted, it took me three months to get to bottom of who the people were, because they were not identifying themselves as immigration officers. I was concerned that new clause 19 should not introduce such a wide power for officials to take other people with them.

Richard Caborn: Clause 301 requires that any person exercising power should provide evidence of his or her identity and authorisation. They will also have to provide information for the purposes of the visit under clause 302. The enforcement officers will be accompanied by additional persons, but they cannot walk in without the enforcement officers. That is clear in clauses 301 and 302.
Amendment agreed to. 
Clause 287, as amended, ordered to stand part of the Bill. 
Clauses 288 to 294 ordered to stand part of the Bill.

Clause 295 - Temporary use notice

Question proposed, That the clause stand part of the Bill.

Don Foster: I choose to speak to clause 295 because it is one of a string of clauses that refers not only to enforcement officers and authorised persons but to constables. Bearing in mind the delicious debate that occupied the minds of many hon. Members at the Committee stage of the Transport Act 2000, can the Minister confirm whether a constable is a constable if he is not wearing his helmet?

Richard Caborn: I should have taken counsel.

Malcolm Moss: It is a 50:50 chance. I will give the right hon. Gentleman odds.

Richard Caborn: That is right. When I find out, I shall write to you about it, Mr. Pike.

Tony Banks: I want to help the Minister. A gentleman in the Room is in such a state of undress. Perhaps we should ask him.

Richard Caborn: I understand that a constable must wear a helmet, but I will check. The constable at back of the Room is obviously not on duty, because he is not wearing his hat.

Peter Pike: We do not know that he is there.

Richard Caborn: The invisible constable.

Tony Banks: What would happen if the constable's hat fell off?

Peter Pike: Order. We do not know that there is anyone else other than members of the Committee in the Room.

Don Foster: The hon. Member for West Ham (Mr. Banks) asked an interesting and intriguing question about what happens if, during an arrest, a constable's helmet fell off.

Peter Pike: Order.

Don Foster: No, what I was saying is relevant to the question that I asked the Minister.

Peter Pike: The Minister determines whether the question is in order.

Don Foster: I trust that you will accept that it is in order, Mr. Pike. The issue of the ability of a police officer to affect a warrant for an arrest if, during the arrest process, the helmet fell off caused a lengthy debate. I urge the Minister to read the report of that discussion. It will be good bedtime reading—nearly as good as Coin Slot International.

Peter Pike: Order. We have been on the subject for long enough. The Minister will write to us about such an interesting point, so let us not debate it at length.
Question put and agreed to. 
Clause 295 ordered to stand part of the Bill. 
Clauses 296 to 300 ordered to stand part of the Bill.

Clause 301 - Evidence of authorisation

Question proposed, That the clause stand part of the Bill.

Nick Hawkins: I wish to return to the issue that I raised a few minutes ago. I am not happy with the Minister's answer. He briefly asserted that the enforcement officers and the authorised persons will have to prove who they are. Of course, that is right; such provisions appear in clauses 301 and 302. However, the other people who we mentioned in connection with new clause 19 are not covered by those clauses. In light of the case in my constituency to which I referred recently, will the right hon. Gentleman take away the thought that he might be willing to table an amendment on Report or in another place that applied clauses 301 and 302 to the other persons who will be allowed under new clause 19 to join the raids on premises?
Clearly, when the Bill was originally drafted, there was no need for clauses 301 and 302 to refer to any person other than enforcement officers and authorised persons—the new clause had not been drafted. The Bill now refers to other persons who may not have to have identification with them. However, it is a crucial part of the sort of country that we want to be that no one should be able to take part in a raid on premises without identifying themselves, so that the person whose premises are being inspected—invaded, as it were—can establish straightaway who those people are.

Richard Page: My hon. Friend is opening up something that I must confess I had missed in the welter of new clauses and documentation that has hit us. Is he suggesting that a police constable with due authorisation could take along the press, cameramen and a panoply of media?

Nick Hawkins: My hon. Friend has in mind a further extension of what happened in my constituency. However, because the powers in new clause 19 are so wide, he must be correct. New clause 19 provides the  completely unfettered power that the enforcement officer or authorised person could take along any other person. They should have to have identification under clauses 301 and 302.

Richard Page: I want to help the Government in this situation. Does my hon. Friend think that they should come forward with regulations on who the police constable and authorised person can take along with them, so that there is a clear list of approved people?

Nick Hawkins: I do, but the Government could deal with the matter by amending clauses 301 or 302 on Report or in another place to take account of new clause 19. My concern once again is that, as my hon. Friend has said on many occasions, the Government are drafting the legislation as they go along. Clauses 301 and 302 should cover the extra class of people established in new clause 19. Another way of doing that, as my hon. Friend suggests, is to provide a limited list that could exclude the press. Perhaps the Government might consider that on Report or in another place.
In the case of the incident in my constituency, it took me a long time to get to the bottom of who the extra people were—they were reluctant to identify themselves in case their names became known and they were prejudiced in terms of other raids that they might make. A totally law-abiding business had people coming in who said that they had official status, but who did not actually identify themselves. That undermines the principle that an Englishman's home is his castle.

Richard Caborn: We must be careful not to predicate the whole Bill on one incident in a pub somewhere in the hon. Gentleman's constituency—that is not a good way of making law. However, I do not know the establishment or the people who entered it, and I would have to do more research to find out exactly why they did so. Broadly speaking, people do have to identify themselves, and that is also the case in this Bill—it does not deal with immigration officers or anyone else.
We have got to trust our enforcement officers. They may want to take the press along with them. In a number of cases, the police have taken the press along to show what is happening, and it has worked out well and highlighted to the public what the police are doing to protect people's liberties. In my constituency, the police took the press with them on a drugs raid and the incident entered the public domain. I see nothing wrong with that, because they are responsible people. If enforcement officers did not have that responsibility, we would not have trust and faith in them to carry out the regulations of the Bill. 
Clause 301 clearly states that 
 ''An enforcement officer or authorised person seeking to exercise a power under or by virtue of this Part must produce evidence of his identity and authority to the person (if there is one) who appears to the enforcement officer or authorised person to be occupying the relevant premises or to have responsibility for their management.''
It is clearly laid down that responsible people will operate and police the Bill, so there is no need for any further amendment. They will be responsible people—trained and properly qualified. If they believe that they need to take other people with them—IT experts, the press or anybody else—in the prosecution of what they have been employed to do, we should leave it up to their sensible approach. 
Question put and agreed to. 
Clause 301 ordered to stand part of the Bill. 
Clauses 302 to 305 ordered to stand part of the Bill.

Clause 306 - Meaning of ''advertising''

Question proposed, That the clause stand part of the Bill.

Don Foster: I have one query. In clause 307, reference is made to the regulations that the Secretary of State will make about the form of advertisements, while advertisements are given meaning in clause 306. It is crucial that people are not accidentally caught up in bits of legislation.
Let us take the example of encouraging people to go to restaurants. Restaurant critics will write reviews in such a form that they may encourage people to go or not to go to the restaurant. There are already a number of publications that, from time to time, include a comment about or review of a particular casino or other location where gambling takes place. That does not come in the form of an advertisement as we would normally know it, but could it be seen to be written with a view to increasing 
''the use of facilities for gambling by bringing . . . information about them to the attention of one or more persons''? 
I would be grateful for clarification on that point.

Richard Caborn: Clause 306 defines what it means to advertise gambling, which is if a person does anything to encourage someone to gamble or provide someone with information about gambling facilities with the intention that that will increase the use of those facilities. That also includes persons who participate in or facilitate an activity knowing or believing that it is designed to encourage gambling activity. The clause makes it clear that advertising in this context includes sponsorship and brand-sharing arrangements.
Providing a clear definition of advertising is essential for regulation of the advertising of gambling. We have deliberately opted for a broad definition to ensure that the following clauses in this part are capable of meeting the key objectives of protecting both the consumer and vulnerable people. What the hon. Gentleman mentioned is not done with a view to increasing participation; it is about comment with a view to providing information.

Don Foster: Just so that I am clear, if someone writing a review is full of praise for a particular casino, its ambience and integrity, would that be deemed not as an attempt to encourage people to use it, but as  merely providing information about it and therefore not an advertisement? It would be helpful if the Minister put that firmly on record.

Richard Caborn: It would not be deemed an advertisement because it would be journalism. As I think the hon. Gentleman accepts, we are into grey areas. It would be part of journalism, and we obviously do not want to stop that, but there is also crude advertising. That is the judgment that one has to make.
Question put and agreed to. 
Clause 306 ordered to stand part of the Bill.

Clause 307 - Regulations

Malcolm Moss: I beg to move amendment No. 390, in clause 307, page 133, line 29, at beginning insert 'Subject to section 23'.

Peter Pike: With this it will be convenient to discuss the following amendments: No. 400, in clause 308, page 134, line 19, after 'of', insert
'a code of practice issued under section 23(3) or'. 
No. 402, in clause 311, page 135, line 34, at beginning insert 
 'A code issued under section 23(3) or'. 
No. 403, in clause 312, page 136, line 5, at beginning insert 
 ' A code issued under section 23(3) or'. 
No. 404, in clause 312, page 136, line 46, after first 'of', insert 
'any code issued under section 23(3) or'.

Malcolm Moss: Amendments Nos. 400 and 402 to 404 are consequential to amendment No. 390 but relate to subsequent clauses.
Part 16 appears to take no account of clause 23, under which the gambling commission has code-making powers, including powers relating to a code on advertising. The intention behind the amendment is to reflect that fact and for the powers available to the Secretary of State under clause 307 to be regarded as reserve powers rather than powers of first resort. 
The Government define reserve powers in the context of gambling in paragraph 32 of the Department's ''Memorandum on Delegated Powers'' of February 2004. Such powers are those where 
''there is no present intention to exercise them, but they have been provided as contingency measures to deal with circumstances which may, but need not, arise.'' 
The amendment helps to codify the Government's intention for the powers available to the Secretary of State to be reserve powers, to which recourse would be made only as a last resort, in the event of consumers not being sufficiently protected by a code issued by the gambling commission under clause 23. The approach is similar to that which the scrutiny Committee on the draft Bill recommended.
Thus, clause 307 should not be regarded as the starting point for the regulation of advertising for gambling products on premises, but it should provide comfort that the Secretary of State could step in should circumstances arise that necessitate such action, if a code issued under clause 23 were failing or could not be remedied through revision. It is my understanding that the Government's policy has been travelling in that direction over recent years, and certainly since the Department published its supplementary policy memorandum in February 2004. That approach is generally welcome.

Richard Caborn: I have some sympathy with the intention behind the amendment. The power to regulate the advertising of gambling set out in clause 307 is indeed a reserve power, as the hon. Gentleman said.
The code of practice is a useful tool in controlling some advertising. The purpose of a code of practice issued by the commission under clause 23 is to give practical guidance to a holder of a licence under the Bill or to other persons involved in providing facilities for gambling. Under part 5, the commission may attach a condition to an operating licence requiring compliance with such a code. 
Rules on advertising cannot be solely contained in licence conditions, however, because breaches of such conditions will fall only to the holders of an operating licence. There needs to be some control of those involved in the advertising of gambling but not gambling activities themselves, such as advertising agencies or newspapers. It is also necessary for rules on advertising to apply to all forms of gambling, including gambling for which a licence is not required. It would therefore be inappropriate to include a reference to ''any code'' on advertising in part 16, as the purpose of such a code is not to give general guidance to the advertising industry. 
Furthermore, non-compliance with the code will not render the offender liable to criminal or civil proceedings. However, a breach of the regulations will result in a criminal offence. The Secretary of State hopes that the actions of external bodies responsible for regulating the advertising industry will be sufficient for the protection of children and the vulnerable. If that is not the case, she will use her reserve powers to make regulations for that purpose. It is redundant, and arguably confusing, to include in these provisions relating to regulation, constant references to codes of practice, which are already provided for elsewhere in the Bill. With that explanation, I hope that the hon. Gentleman will not press these amendments.

Peter Pike: Is it the Committee's intention to try to finish this clause before the Divisions in the House? I understand that there will be a Division at 5.30 pm, but neither that nor the amount of time that you take on these items is under my control.

Malcolm Moss: I am not sure that I am swayed by that argument, Mr. Pike, but I will be as quick as I can.

Peter Pike: All I am saying is that it is a consideration if the Committee does not want to come back after the Divisions in the House. Do you understand what I am saying?

Malcolm Moss: I do, and I shall be brief.
The Government have passed responsibility for advertising standards to the Advertising Standards Authority, and Ofcom on the other side, which have now come together so that we have a one-stop shop for all kinds of advertising, yet here the Government seem to be retaining quite a lot of influence over advertising for gambling. I am not persuaded that that is necessarily the right way to go about things. 
Disquiet has been expressed that the Secretary of State is taking too much power centrally. Responsibility for many advertising standards has been given to the one body, which used to be two and, on my reading of clause 23, the gambling commission is given considerable powers in that area, which it should exercise. Bearing in mind what the Minister has said, I am happy to reflect on the matter, and may come back to it on Report. I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn.

Malcolm Moss: I beg to move amendment No. 391, in clause 307, page 133, line 31, leave out subsection (2).

Peter Pike: With this it will be convenient to consider the following amendments: No. 392, in clause 307, page 133, line 36, leave out subsection (3).
No. 397, in clause 307, page 134, line 6, leave out subsection (8).

Malcolm Moss: The arguments for these amendments follow on fundamentally from those that I have just presented. Subsection (2) states:
 ''The regulations may, in particular, make provision about— 
(a) the form of advertisements; 
(b) the content of advertisements; 
(c) timing; 
(d) location.'' 
That is fairly prescriptive as to what the Secretary of State may address through the regulations. The advertising industry is concerned by that approach, suggests that such matters should be left to the gambling commission and that, rather than the Secretary of State being involved as a line of first resort, she should have reserve powers that can be picked up if the legislation is not working properly.

Richard Caborn: The removal of subsections (2), (3) and (8) will not limit the Secretary of State's ability to make regulations to control advertising, but the amendments would remove any indication of how the regulations may be applied. The Government's intention in including these measures was to provide a helpful steer to operators and advertisers. They give interested parties an idea of the likely shape that the regulations will take, but they are not so inflexible as to limit the Secretary of State's powers. The removal of these subsections would not confer any benefit on the  persons to whom the regulations will apply. With that explanation, I ask the hon. Gentleman to withdraw the amendment.

Malcolm Moss: I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Malcolm Moss: I beg to move amendment No. 393, in clause 307, page 133, line 38, leave out subsection (4).
I am doing a Minister now—I am desperately trying to find where I am. I have no help, though—there is no one handing me bits of paper.

Don Foster: Will the hon. Gentleman give way?

Malcolm Moss: Yes.

Don Foster: Has the hon. Gentleman not found this the most fascinating clause of our deliberations on the Bill? Would it not be helpful to the Committee if he were to get on and tell us what his amendment is about, since by now he will have had time to find his notes?

Peter Pike: It is to leave out subsection (4).

Richard Caborn: The hon. Gentleman should have moved it formally.

Malcolm Moss: Yes, perhaps I should.

Richard Caborn: I am trying to help the hon. Gentleman. May I say that that was a brilliant and scintillating explanation of the amendment? However, the amendment has the undesirable effect of removing a specific duty on the Secretary of State to take into account the need to protect children and vulnerable people when making regulations to control advertising.
The subsection reflects the high level of importance that the Government place on this issue, which is one of the three core objectives of the Bill. It is therefore  essential that any control over gambling advertising will have the desired effect of protecting children and the vulnerable against exploitation. 
I cannot see any detrimental effect in maintaining the clause as drafted. In fact, a detrimental effect is more likely to occur if the subsection is removed and the opportunity is missed to affirm the duty to protect children and vulnerable people, not only in the regulation of gambling, but in the regulation of the advertising of gambling. 
I am sure that the hon. Gentleman shares the Government's aims of protecting the most vulnerable members of our society from exploitation by gambling. I therefore hope that he will withdraw the amendment.

Malcolm Moss: I share the Minister's views on protecting children and on the other points that he made in relation to the earlier amendments about addressing areas of advertising related to gambling. However, I am still not quite clear why that cannot be achieved by codes of practice devised by the gambling commission and why the Secretary of State needs to weigh in with the heavy-handed and rather draconian powers that the Bill provides. However, we will reflect on what the Minister has said, and may revisit the matter later. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. 
Clause 307 ordered to stand part of the Bill. 
Further consideration adjourned.—[Mr. Watson.] 
Adjourned accordingly at twenty-seven minutes past Five o'clock till Thursday 16 December at half-past Nine o'clock.